EXHIBIT 5

               [Letterhead of American International Group, Inc.]

                                                               September 3, 2003


American International Group, Inc.
70 Pine Street
New York, New York  10270

Ladies and Gentlemen:

      In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of 35,781,250 shares (the "Securities") of Common Stock,
par value $2.50 per share (the "Common Stock"), of American International Group,
Inc., a Delaware corporation (the "Company"), I, as Senior Vice President and
Deputy General Counsel of the Company, have examined such corporate records,
certificates and other documents, and such questions of law, as I have
considered necessary or appropriate for the purposes of this opinion.

      Upon the basis of such examination, I advise you that, in my opinion, with
respect to the Securities (the "Option Shares") to be acquired upon the exercise
of stock options (the "Options") granted under the American International Group,
Inc. Amended and Restated 1999 Stock Option Plan (the "Option Plan"), and the
Securities (the "Purchase Shares") to be acquired under the American
International Group, Inc. Amended and Restated 1996 Employee Stock Purchase Plan
(the "Purchase Plan" and, together with the Option Plan, the "Plans"), when the
registration statement relating to the Securities (the "Registration Statement")
has become effective under the Act, the Option Shares are duly issued and
delivered upon the exercise of the Options in accordance with their terms and
the terms of the Option Plan, and the Purchase Shares are duly issued and
delivered in accordance with the terms of the Purchase Plan, and the Securities
are issued, paid for and sold as contemplated by the Registration Statement, the
Securities will be validly issued, fully paid and non-assessable.

      The foregoing opinion is limited to the Federal laws of the United States
and the General Corporation Law of the State of Delaware, and I am expressing no
opinion as to the effect of the laws of any other jurisdiction.

      With your approval, I have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by me to be responsible, and I have assumed that the certificates for
the Securities will conform to the specimen thereof examined by me and will be
duly countersigned by a transfer agent and duly registered by a registrar of the
Common Stock, that at the time of delivery of each Security all conditions to
such delivery shall have been satisfied or waived, and that the signatures on
all documents examined by me are genuine, assumptions that I have not
independently verified.

      I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not thereby admit that I am
in the category of persons whose consent is required under Section 7 of the Act.

                                             Very truly yours,


                                             /s/ Kathleen E. Shannon
                                             -------------------------
                                             Kathleen E. Shannon
                                             Senior Vice President and
                                             Deputy General Counsel